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Sustainability reports have mixed impact on businesses

Sustainability rankings have mixed meaning for executives, investors and other

Every year, a variety of organizations rank major companies across the globe by their levels of sustainability and how they're responding to the potential for climate change. Recently, the Carbon Disclosure Project and the Dow Jones Sustainability Indexes announced the results of their annual surveys.

Both groups reported high levels of participation in this year's report; the DJSI said there were 8 percent more respondents this year compared with 2011, and the CDP said it had an 81 percent response rate from the Global 500 companies it sampled. Co-written by audit and accounting firm PricewaterhouseCoopers, the CDP report highlights updates and sustainability investments made by companies, while the DJSI identifies industry leaders in sustainability practices.

While sustainability professionals place a heavy emphasis on these rankings, the companies involved in the surveys appear to view them as a way to compare their efforts with competitors and receive attention from outside sources, according to sustainability expert Michael Sadowski. Writing for, he noted that a survey of some of the companies involved revealed that the rankings typically don't influence business purchasing decisions or other aspects of business, and have minimal impact on employees and business partners. And when it comes to investor relations, the views are mixed, Sadowski said.

"In its release, CDP cites that its work has been done on behalf of 655 institutional investors representing $78 trillion in assets, while DJSI reports a number of major investors that license the DJSI. These data points lend the impression that investors are switched onto the sustainability agenda," he wrote. "Yet it's hard to square this with the survey Bloomberg released earlier in September that found that almost 50 percent of global investors believe that climate change will have 'not much impact' on corporate profitability."

In fact, the Bloomberg report Sadowski mentioned found that fewer investors think climate change will have any impact on the environment at all, let alone business executive jobs. In 2009, roughly 48 percent of investors said global warming is a serious concern; this year, just 38 percent felt the same way.

Those with executive jobs, however, don't appear to be quite as cavalier in their approach to global warming as investors. A recent survey from Ernst & Young found that executives, particularly those in high energy consumption fields like manufacturing, are beginning to take the rising cost of energy into account when planning their risk management strategies. Many of those surveyed for the E&Y report said energy costs consume at least 5 percent of their operating budgets, and 38 percent expect energy costs to rise 15 percent in the next few years.